An upbeat assessment of the performance and outlook for Smith & Nephew has been given as it awaits permission to build a huge new base in East Yorkshire.
The FTSE-listed medical equipment manufacturer recorded the finest of increases in revenue, up 0.1 per cent - or £3.4 million - remaining within the £4.3 billion bracket. Sales were up 1.4 per cent in the final quarter for the Hull-founded firm, though margins tightened considerably, from 11.4 per cent to 8.6 per cent, with operating profit down from £490 million to £372 million.
Deepak Nath, chief executive of the firm, which employs almost 800 staff in the city and 20,000 globally, said: "We made good progress during 2022 and ended the year in a much stronger position than we started. We continued to outperform in Sports Medicine, Ear Nose and Throat and Advanced Wound Management and, even though we are early in our work to fix Orthopaedics, performance improved here too.
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"With our 12-point plan, we are fundamentally changing the way Smith & Nephew operates to drive higher growth and improve productivity. It is starting to deliver, and, as we progress through the two-year life of the plan, we expect further operational and financial benefits, including a reduction in inventory levels and cash conversion to return to historic levels. We are benefiting from our increased investment in innovation, with more than 60 per cent of growth in 2022 coming from products launched in the last five years.
“We will continue to face macroeconomic headwinds in 2023. However, I believe the drivers of further growth are in place, including leading technologies across all three franchises and a clear path to improved execution in Orthopaedics. We expect to deliver both faster revenue growth and margin expansion in the coming year, and are setting a solid foundation for our midterm ambitions as we transform to a consistently higher growth company."
As reported, the company is looking to relocate its Advanced Wound Management business unit from the founding city to a £94 million state-of-the-art centre at Melton West Business Park, eight miles along the A63.
A new three-storey facility with manufacturing, research and development functions would replace the high profile city gateway site, gradually developed into the current nine building complex from 1907. Described as “disjointed and inefficient,” the business is eyeing potential revenues of more than £8 billion in a first decade of operations there.
Launched from a small pharmacy operated by Thomas James Smith in 1856, Smith & Nephew is now headquartered in Watford.
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